Should Charter Schools Pay Rent?

February 26, 2014

New York City Mayor Bill de Blasio has called for charter schools to pay rent for the use of district school space, charging rent to "well-resourced" charter schools on a sliding scale, says Stephen Eide, a senior fellow at the Manhattan Institute.

  • New York City has 183 charter schools currently in operation, with 70,000 students enrolled.
  • Some New York City charter schools use unused or underused district school space, though they do not pay rent on that space.
  • Those schools that do share facility space are known as "co-located" schools.
  • In New York, two-thirds of charters are co-located, compared to 25 percent of charters nationwide.

So what would paying rent mean for these charters?

  • Charter schools must rely solely on enrollment-based revenues for funding, unlike traditional public schools, which are funded through general obligation bonds. Meeting facility needs is difficult for charters, which do not have the same revenue stream as district schools.
  • Had schools been charged rent during the 2011-2012 school year (the last for which data is available), 71 percent of co-located charters would have been forced into deficit, with an average deficit at $682,983.
  • Seventy percent of co-located charter school budgets go toward personnel costs. Therefore, to offset the rent cost, schools would most likely have had to fire teachers.

New York City's charter schools are strong and have outperformed district public schools in 29 out of 36 performance categories over the last three years, and co-location has been an important factor in the growth of charter schools in New York. While co-located and non-co-located charters tend to perform equally well, charging rent to co-located charters would likely result in closures and loss of teachers, reducing the number of good charter options for students.

Source: Stephen Eide, "Should Charter Schools Pay Rent? Implications for Staffing and Growth," Manhattan Institute, February 2014.

 

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